Sham Cancer Charities Agree To $2.5M Settlement In MD Lawsuit

BALTIMORE, MD — Cars, boats, luxury clothing, trips overseas and to Disney World — they were all paid for by nearly $200 million in donations to cancer charities that the founders diverted for their own use, Maryland officials said Thursday. A settlement of $2.5 million has been reached by the state attorney general's offie and four sham charities – the Cancer Fund of America, Inc., The Breast Cancer Society, Inc., Cancer Support Services, Inc., and the Children’s Cancer Fund of America.

Attorney General Brian Frosh said in a news release that the charities' founder, James Reynolds, and any other people who were the leaders of the false charities are banned from any charity or fundraising activities for the rest of their lives. Money paid through the settlement will be distributed to cancer centers across the country.

The settlement is the result of a lawsuit brought in May 2015, and the first time that all 50 states, the District of Columbia and the Federal Trade Commission joined together to shut down fake charities.

“This settlement means that a small, but meaningful, amount of the monies recovered will be used to help cancer patients,” Frosh said in a news release. “Mr. Reynolds and his colleagues will never touch a charitable donation again.”

The complaint alleged that the so-called charities, led by Reynolds and his family members, bilked the public out of more than $187 million between 2008 and 2012. Of the money collected, only 3 percent was directed to cancer patients in the United States in the form of “care packages” containing religious DVDs, Moon Pies, random items of clothing, and various sundries, authorities said.

Cancer Fund of America also claimed to supply patients with pain medications and transportation to chemotherapy treatments, when it provided no such services. The charities also participated in a “gift-in-kind” program that sent drugs that had nothing to do with cancer to other countries; Frosh's office said it was a way to make the organizations appear larger than they were and to hide their high fundraising costs.

The leaders of the bogus charities used donations to pay themselves exorbitant salaries and for trips to Thailand, Las Vegas and Disneyworld. Authorities said cars, boats, jet skis and houses, and used the charities’ credit cards to buy designer handbags, jewelry and clothing, and to pay for day-to-day expenses such as gas, groceries and utility bills.

The money will be transferred to Rockefeller Philanthropy Advisors to distribute the money to select health and medical programs targeting breast and pediatric cancer.